Estate Planning Lawyers: Understanding Pennsylvania Inheritance Tax
Last updated on August 6, 2024
After losing a loved one, the last thing you want to think about is taxes. Pennsylvania is one of the few states that imposes inheritance taxes. Both probate and non-probate assets, which are jointly-owned or beneficiary-designated, are subject to this tax.
Inheritance Tax In Pennsylvania
Inheritance tax is imposed on the value of property that a loved one passes on following their death. The costs of a funeral, administering an estate, and final bills are among the expenses that can be deducted to reduce the amount of inheritance taxes owed.
The tax rates vary based on the relationship of the beneficiary to the deceased:
- Spouses: 0% inheritance tax
- Lineal heirs (children and grandchildren 21 and over, parents, grandparents): 4.5% inheritance tax
- Children under 21: 0% inheritance tax
- Siblings: 12% inheritance tax
- Other heirs: 15% inheritance tax
Pennsylvania’s inheritance tax is separate from the Federal estate tax, which applies only where the decedent’s assets are at least $13,610,000.00 in 2024.
Types Of Property Subject To Inheritance Tax
A vital part of preparing to meet your inheritance tax obligations is understanding the types of property that may be taxed. Unfortunately, most assets are subject to this tax under Pennsylvania law. Examples include:
- Real property: Land, buildings
- Tangible personal property: Cash, automobiles, furniture, antiques, jewelry, art collections
- Intangible personal property: Stocks, bonds, bank accounts, business interests
Life insurance proceeds are not subject to inheritance tax. In addition, some asset transfers are exempt, such as certain farmland transfers, charitable donations to qualified organizations and bequests to government entities.
Those who owe inheritance tax must pay the debt within nine months of the death to avoid interest and penalties. There is also a 5% discount if the taxes are paid within 3 months.
Sikov and Love, P.A., Offers Experienced Guidance
At Sikov and Love, P.A., we have served our clients as a trusted legal resource since 1952. Our attorneys are experienced in estate administration, including Pennsylvania inheritance taxes. Lead attorney, Carol Sikov Gross, is a certified elder law attorney. Let us help you prepare for the inheritance tax liabilities you may face.
If you are uncertain about the inheritance tax you may owe or need clarification on whether you owe any at all, call us in Pittsburgh at 412-567-1236. Our attorneys can help you make sense of your inheritance tax obligations and assist with other estate administration needs you may have.